Economist sees increased chance of interest rate cut this year

Canada could cut interest rates again this year if exports continue to disappoint according to investment bank Nomura.

In a client note, economist Charles St-Arnaud wrote that the BoC’s growth forecast needs better results from non-energy exports and without that growth the current 40 per cent expectation for an interest rate cut could rise.

While a rate cut may benefit businesses that are under pressure from cheaper labour and materials costs in Asia and Mexico, it would also raise a familiar concern: “The BoC should be worried if it reignites household borrowing and the housing market, while business investment is currently not very sensitive to rate cuts,” St-Arnaud wrote.








Source:  http://www.canadianrealestatemagazine.ca/market-update/economist-sees-increased-chance-of-interest-rate-cut-this-year-212038.aspx